Help for Homeowners

Our government is really trying.  What they are trying to do is beyond me at this point in time, but they are trying.

Take, for instance,  HAFA and HAMP.  No one can claim ignorance to these programs for no matter who you are, where you live, or what you do to earn your living everyone of us knows someone who is facing foreclosure.  At the very least, we have seen signs in our neighborhood advertising short sales or offering free big screen televisions with the purchase of the house.

Worse yet, we have all noticed the houses which suddenly sprout overgrown lawns and have window coverings that never budge.

Yes, HAFA and HAMP have been put into place to help the struggling homeowners.  Yet, let us consider where the government bail outs went.  Most banks are ditching FDIC insurance which means your money is gone if they go belly up, yet they continue to pay bonuses from TARP.

Most recently, we have seen whistle blowers.  That rare employee with a guilty  conscience who is simply not comfortable with the lack of ethics displayed by these organizations is shedding light on why more control  over these programs where the banks are concerned is necessary.

On April 5, 2010, the world of mortgages and real estate will take another drastic turn.  All other options will have to be examined prior to foreclosure.    Here is where we say “Houston…we have a problem”.

To date mortgage modification programs are not working for the majority of those that truly need help.  The banks have found a way around it.  Borrowers are required to go through a trial period, ensuring that the modified payments can be made in full and in a timely manner in order to qualify for the Mortgage Relief Act program.  A struggling homeowner goes into the bank requesting modification.  The modification is permitted.  The loan is paid in full and on time through out the duration of the trial period.  Three payments are received by the bank.  Although all conditions have been met, the homeowner then receives notification that they are not qualified for the program and foreclosure begins.  The bank has collected money, squeezing the payments out of the homeowner by giving them false hope then intentionally denies the applicant and forecloses on the property.

The news we have seen lately is discouraging.  Stringent regulations need to be placed to control the banking industry and stop the highway robbery.  We cannot simply blame sub-prime lenders, and trust that the Big Banks are going to step in and cure everything.  They obviously will not. Unfortunately, this is just the tip of the iceberg.  As the days progress, I am certain that we will see all of the disturbing practices of the banking industry come to light.

Short Sales and Loan Modification are viable options when they are executed with knowledge and experience.  Contracting experienced and knowledgeable processors to work with you to successfully execute your transactions is a very wise option.  Checking into ratings, complaints filed and past history of a company are very important when making a decision on who to partner with.

Do you really want to send a message out?

America has, up until now, taken plastic and classified it as progress.  Think about this.  You are adding 22% interest to everything you buy with a credit card.  Each time you buy a $3.45 gallon of milk , you are adding 76 cents to that if you use a credit card after the big banks have jacked your rate to 22%.   If that does not stop you nothing will.

Do you remember the days where you carried a dime in your pocket so that you could call home while you were out with friends?  A time where plastic cards with endless funding did not exist?  I’ve been reminiscing and it is a time we need to bring back so that we send a message out to big business that rewarding those who squandered our money is not acceptable.

Each time you use your debit card as a credit card the bank makes a profit of at least $7.00 a transaction.  Regulations have been placed to “stop abusive practice”.  We’ll fix this right?  WRONG.  The fees to your merchants will be raised by $1.00 per transaction.  To absorb the increase, grocery, gasoline, fast food, and any other establishments will raise prices by $1.10 per transaction.  Who is paying the piper?  You are.

Getting the message out will not be easy.  Action and sacrifice will be necessary.    We will have to return to a time where values and restraint were commonplace and common sense was considered part of an education.  We will save money, we will save our merchants money.  We will stand up and make a statement, united rather than divided.

Can you imagine if, for one week, everyone paid for everything in cash?  If we could spend 7 days living within our means, not using debit or credit cards, the message would be loud and clear.  We will not reward bad behavior.

So…for the week of February 7th through February 14th, 2010 let us stop complaining and take action.  Go the bank, cash a check for the amount you will spend in that week.  Go home and take all your credit and debit cards out of your wallet.  Stick to your budget.  The impact will undoubtedly send the right message.

Coming Soon…The New Definition of Going Green

“Going Green” is about to take on new meaning.  Talk of stopping the use of plastic is going to mean more than cutting down on the purchase of disposable products and purchasing cloth shopping sacks.  America is finally feeling the effects of the “Charge It” generation.  Hold on to your boots kids, we are about to return to more disciplined times.

Most prevalent in the headlines is the sub-prime mortgage industry.  Firm after firm has imploded, and the Wall Street Firms that invested heavily in those mortgages are about to topple.   People who trusted these investment firms to manage retirement accounts have collectively lost billions of dollars, which presents a crisis for those ready to retire.  These Baby-Boomers are now faced with working well into their seventies to compensate for the losses. 

America’s homeless population rises by the day, as banks file foreclosure actions in rising numbers.  People are aware for the first time in a long time that the loaf of bread which was $1.29 last week now costs $1.40.  Comparison shopping is back in style.I can visualize the nightmare.  The same children that were spoiled rotten with designer clothing at top prices are going to be holding their breath until they turn blue.  Gone are the days where a credit card can be handed over with a “Now dear, use good judgment”.    The reign of terror created by American eagle, Aeropostle and others is just about over. 

Over a year ago, I voiced an opinion that the predicted “nine month cycle” of a real estate crisis would not turn out as the “experts” were forecasting.  We can no longer use plastic to put ourselves into debt for expensive video game systems, designer clothing and other frivolous commodities. 

Now that we have people making mortgage payments and tax payments courtesy of Visa and American Express, what happens when they default on those payments?  The cycle has to stop. 

Cut the cards, shred them, burn them …throw away the remains.  If you cannot pay for it in cash, don’t buy it.  If you cannot qualify for an A mortgage do not buy a home.  Let personal responsibility reign and for heaven’s sake, when you say “I’m going green “apply the philosophy to your budget as well.